Amazon: “Shareholder lawsuit has no merit”
September 4, 2023
By Chris Forrester
A shareholder in Amazon (the Cleveland Bakers & Teamsters Pension Fund/CB&T) is suing the company alleging that Amazon snubbed potential launch contracts from SpaceX because of personal animosity between Jeff Bezos and Elon Musk.
Amazon, in a statement, said “the claims in this lawsuit are completely without merit, and we look forward to showing that through the legal process.”
Amazon is developing its broadband-by-satellite service, Project Kuiper, and has selected three rocket launch contractors to place its satellites into space. The three are the Jeff Bezos-backed Blue Origin, Europe’s Arianespace and the United Launch Alliance. But SpaceX was never considered, which is the basis of the lawsuit.
In its May AGM, Amazon disclosed it expects to pay about $7.4 billion (€6.8bn) for launch services through 2028, with $2.7 billion expected to go to Blue Origin which is wholly owned and financed by Bezos.
CB&T are alleging two counts of breach of fiduciary duty against Amazon. CB&T alleges the Amazon audit committee received only “a brief summary of the terms of the contracts” and “rubberstamped” the deal “after only a few minutes of discussion.”
“It had no information about how Bezos and his management team conducted the negotiations with Blue Origin. It had no information about the level of Bezos’ involvement. It had no information about how many other launch providers (if any) Bezos and his management team explored contracting with. It had no information about Blue Origin’s struggles to develop the New Glenn, about how these struggles might jeopardize Amazon’s ability to meet its FCC-mandated 2026 deadline, or about how Blue Origin planned to overcome these struggles,” CB&T’s lawsuit says.